I am forever encouraging employers to ask this question of those within their organization. Regardless of age, most employees have little clue about the business model their organization works within.
Over the years, for instance, grocery workers have been surveyed about the profit margin on various items in the store. Consistently, the estimates range from 30-50% when the real margin is closer to 3-5%.
Human nature dictates that people only care about that of which they are informed and which impacts them. Business models and profit margins are irrelevant to front-line workers, many of whom don’t look past the paycheck.
Sadly, I find this is also common among many further up the food chain. If we want workers — especially the young ones– to think about how to save money, work smarter and genuinely care about organizational health, we need to show them the impact of their actions and inactions. So how to you change this? Make it real for them. Here are three quick ideas:
1. Paint them a picture. Create a flow chart of how the company makes money on one particular product or service. Make it graphic. Provide examples. If appropriate, create a short video, narrated by the president, that walks them thru the entire process. Ask two or three questions at the end to spur their thinking on how to save money or increase productivity. Send them a clear message that smarter work has a direct result on organizational health, job security and increased compensation over time.
2. Demonstrate it. One furniture dealer in CA periodically gathers his entire team in the warehouse and pulls an expensive living room or bedroom set off the racks to place before them. Then, using a big stack of five dollars bills, he shows them a $3000 sale can be reduced to a 3% profit of $90 because of commissions, cost of goods, overhead, taxes, and so on.
3. Integrate it as a theme. Mention the business model in meetings, use it as a part of training. Ask people about it periodically. Every employee should get the message that understanding how the organization makes money is an essential part of the information he or she should know in order to thrive. While this will take time to imbue, the result will be suggestions for improvement, more of a focus on mistakes and efficiencies and belief that every person is making a contribution because they understand how they fit into the model.